Bush taps former senators Mack, Breaux to head tax panel

CorbettB. Daly

WASHINGTON (CBS.MW) -- President Bush named a pair of former senators, Florida Republican Connie Mack and Louisiana Democrat John Breaux, to head his newly created panel on overhauling the U.S. tax code.

"These are distinguished citizens of our country and I am proud you are here," Bush said with the two senators and Treasury Secretary John Snow at his side in the Oval Office.

"A simple code will make it easier on the taxpayers," Bush said.

Mack will serve as chairman and Breaux will serve as vice chairman of the 9-member commission, tasked with coming up with proposals for simplifying the tax code, which would then be implemented by the Treasury Department.

In addition to changing the way Social Security is administered, revamping the tax code is a major domestic policy goal of Bush's second term.

"I am firm in my desire to get something done. We are going to take their work and we'll go to the Congress and say let's work together to achieve something very constructive for the American people," Bush said.

The panel is expected hold public hearings across the country in the coming months and report back to the Treasury Department by the end of July, Mack told reporters at the White House.

Snow said he expects the report will not be a surprise to tax policy makers within the administration.

"It's going to be a result that tees up real tax reform," Snow said.

Mack said the panel did not have preconceived notions of how it wanted to change the tax code.

"There is no end result that he is trying to lead us to, other than the fact that he said this has got to be simple," Mack said.

In addition to Mack and Breaux, Bush tapped former Representative Bill Frenzel, now of the Brookings Institution; USC law professor Elizabeth Garrett; Stanford Business School professor Ed Lazear; former head of the Federal Trade Commission Timothy Muris; Massachusetts Institute of Technology professor James Poterba; former Internal Revenue Service chief Charles Rossotti; and Liz Ann Saunders, chief investment strategist at Charles Schwab.

Democrats charged that the panel members were hand-picked to agree with the prior positions of the administration.

"Again, we see a White House looking for so-called recommendations only from those everyone knows will agree with the administration," said New York Rep. Charles Rangel, the top Democrat on the tax-writing House Ways and Means Committee.

"I hope the president understands that it will take more than one former Senate Democrat to obtain the broad bipartisan support that is needed to make the tax code truly simpler and fairer," Rangel said, referring to Breaux.

Breaux was considered a dealmaker in his tenure at the Senate Finance Committee, where he often sided with Republicans on key votes that paved the way for legislative compromise.

Frenzel is a former Republican lawmaker from Minnesota, while Muris just recently left the Bush administration to teach at George Mason University. Saunders has appeared at White House sponsored economic forum and Poterba's name has been cited in the past as a possible addition to the administration. Garrett worked for former Sen. David Boren, a moderate Democrat from Oklahoma. Rossotti was appointed to head the IRS by President Clinton in 1997 and stayed on to serve in the Bush administration until 2002. Lazaer also serves as senior fellow at the conservative Hoover Institution.

Minutes after the panel was announced, Senate Finance Committee Chairman Charles Grassley, R-Iowa, and Montana's Max Baucus, the committee's top Democrat, sent a letter to the Mack and Breaux urging them to use the same technical system used by lawmakers on Capitol Hill to calculate, or score, the potential costs of any proposed changes to the tax code.

"We fear that failure to adhere to congressional estimating standards would severely undermine any proposal recommended by the advisory panel," the two lawmakers wrote. The White House traditionally uses its own scoring system.

Garrett said she thinks "it's a good thing that we have several institutions producing scoring."

She added that the panel would consider an income-based tax, a consumption tax, and even a "mixed" tax.

"Any system that we discuss should be fair and progressive," she said, adding that she thinks "it's very important to keep rates and base separate."

The executive order establishing the panel said any recommendations must simplify the tax code, be progressive and promote long-run economic growth and job creation.

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